1. value: 5.00 points Exercise 6-4 Income effects of inventory methods L.O. A1 Park Company reported the following March purchases and sales data for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 150  units  @ $7.00 = $ 1,050 Mar. 10 Sales 90  units @$15 Mar. 20 Purchase 220  units  @ $6.00 = 1,320 Mar. 25 Sales 145  units @$15 Mar. 30 Purchase 90  units  @ $5.00 = 450 Totals 460  units $ 2,820 235  units Park uses a perpetual inventory system. For specific identification, ending inventory consists of 225 units, where 90 are from the March 30 purchase, 80 are from the March 20 purchase, and 55 are from beginning inventory. 1. Complete comparative income statements for the month of March for Park Company for the four inventory methods. Assume expenses are $1,600, and that the applicable income tax rate is 30%. ( Round per unit costs to three decimal places. Round your answers to the nearest dollar amounts. Input all amounts as positive values. Omit the "$" sign in your response.) PARK COMPANY Income Statements For Month Ended March 31 Specific Identification Weighted Average FIFO LIFO   Sales $ [removed]       $ [removed]       $ [removed]     $ [removed]       Cost of goods sold [removed]       [removed]       [removed]     [removed]       Gross profit [removed]       [removed]       [removed]     [removed]       Expenses [removed]       [removed]       [removed]     [removed]       Income before taxes  [removed]       [removed]       [removed]     [removed]       Income tax expense [removed]       [removed]       [removed]     [removed]       Net income $ [removed]       $ [removed]       $ [removed]     $ [removed]     2. Which method yields the highest net income? [removed] FIFO [removed] Weighted average [removed] Specific identification [removed] LIFO 3. Does net income using weighted average fall between that using FIFO and LIFO? [removed] Yes [removed] No 4. If costs were rising instead of falling, which method would yield the highest net income? [removed] Weighted average [removed] Specific identification [removed] LIFO [removed] FIFO Problem 6-1A Alternative cost flows-perpetual L.O. P1 [The following information applies to the questions displayed below.] Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 50  units  @ $50/unit Mar. 5 Purchase 200  units  @ $55/unit Mar. 9 Sales 210  units @ $85/unit Mar. 18 Purchase 60  units  @ $60/unit Mar. 25 Purchase 100  units  @ $62/unit Mar. 29 Sales 80  units @ $95/unit Totals 410  units 290  units references  2. value: 3.00 points Problem 6-1A Part 1 Required: 1. Compute cost of goods available f.

1. 1.
value:
5.00 points
Exercise 6-4 Income effects of inventory methods L.O. A1
Park Company reported the following March purchases and
sales data for its only product.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
Mar.
1
Beginning inventory
150
units
@ $7.00
=
$
1,050
Mar.
10
Sales

2. 90
units
@$15
Mar.
20
Purchase
220
units
@ $6.00
=
1,320
Mar.
25
Sales

3. 145
units
@$15
Mar.
30
Purchase
90
units
@ $5.00
=
450

4. Totals
460
units
$
2,820
235
units
Park uses a perpetual inventory system. For specific
identification, ending inventory consists of 225 units, where 90
are from the March 30 purchase, 80 are from the March 20
purchase, and 55 are from beginning inventory.
1.

5. Complete comparative income statements for the month of
March for Park Company for the four inventory methods.
Assume expenses are $1,600, and that the applicable income tax
rate is 30%.
(
Round per unit costs to three decimal places.
Round your answers to the nearest dollar amounts. Input all
amounts as positive values. Omit the "$" sign in your response.)
PARK COMPANY
Income Statements
For Month Ended March 31
Specific
Identification
Weighted
Average
FIFO
LIFO
Sales
$ [removed]
$ [removed]
$ [removed]
$ [removed]
Cost of goods sold
[removed]
[removed]
[removed]
[removed]
Gross profit
[removed]
[removed]
[removed]
[removed]

6. Expenses
[removed]
[removed]
[removed]
[removed]
Income before taxes
[removed]
[removed]
[removed]
[removed]
Income tax expense
[removed]
[removed]
[removed]
[removed]
Net income
$ [removed]
$ [removed]
$ [removed]
$ [removed]
2.
Which method yields the highest net income?
[removed]
FIFO
[removed]
Weighted average
[removed]
Specific identification
[removed]

7. LIFO
3.
Does net income using weighted average fall between that using
FIFO and LIFO?
[removed]
Yes
[removed]
No
4.
If costs were rising instead of falling, which method would
yield the highest net income?
[removed]
Weighted average
[removed]
Specific identification
[removed]
LIFO
[removed]
FIFO
Problem 6-1A Alternative cost flows-perpetual L.O. P1
[The following information applies to the questions displayed
below.]
Anthony Company uses a perpetual inventory system. It entered
into the following purchases and sales transactions for March.

8. Date
Activities
Units Acquired at Cost
Units Sold at Retail
Mar.
1
Beginning inventory
50
units
@ $50/unit
Mar.
5
Purchase
200
units
@ $55/unit
Mar.
9
Sales

9. 210
units
@ $85/unit
Mar.
18
Purchase
60
units
@ $60/unit
Mar.
25
Purchase
100
units
@ $62/unit
Mar.
29

10. Sales
80
units
@ $95/unit
Totals
410
units
290
units

11. references
2.
value:
3.00 points
Problem 6-1A Part 1
Required:
1.
Compute cost of goods available for sale and the number of
units available for sale.
(Omit the "$" sign in your response.)
Cost of goods available for sale
$ [removed]
Number of units available for sale
[removed]
units
check my work
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references
3.
value:
3.00 points

12. Problem 6-1A Part 2
2.
Compute the number of units in ending inventory.
Ending inventory
[removed] units
check my work
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references
4.
value:
3.00 points
Problem 6-1A Part 3
3.
Compute the cost assigned to ending inventory using
(a)
FIFO,
(b)
LIFO,
(c)
weighted average, and
(d)
specific identification. For specific identification, the March 9
sale consisted of 40 units from beginning inventory and 170
units from the March 5 purchase; the March 29 sale consisted of
20 units from the March 18 purchase and 60 units from the
March 25 purchase.
(Due to rounding, the sum of Cost of Goods Sold and Ending
inventory may not equal the Cost of Good available for sales.
Round your weighted average cost to 3 decimal places. Round
your final answers to nearest whole dollar amount. Omit the "$"
sign in your response.)

13. Ending
Inventory
(a)
FIFO
$ [removed]
(b)
LIFO
$ [removed]
(c)
Weighted average
$ [removed]
(d)
Specific identification
$ [removed]
rev: 12_18_2012
check my work
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references
5.
value:
3.00 points
Problem 6-1A Part 4
4.
Compute gross profit earned by the company for each of the
four costing methods.
(Round your per unit costs to 3 decimal places and inventory
balances and final answer to the nearest dollar amount. Omit the
"$" sign in your response.)
Gross profit

14. FIFO
$ [removed]
LIFO
$ [removed]
Weighted average
$ [removed]
Specific identification
$ [removed]
6.
value:
5.00 points
Problem 6-4A Analysis of inventory errors L.O. A2
Doubletree Company’s financial statements show the following.
The company recently discovered that in making physical
counts of inventory, it had made the following errors: Inventory
on December 31, 2010, is understated by $50,000, and inventory
on December 31, 2011, is overstated by $20,000.
For Year Ended December 31
2010
2011
2012
(
a
)
Cost of goods sold
$
725,000
$
955,000
$
790,000
(
b

15. )
Net income
268,000
275,000
250,000
(
c
)
Total current assets
1,247,000
1,360,000
1,230,000
(
d
)
Total equity
1,387,000
1,580,000
1,245,000
Required:
1.
For each key financial statement figure—(
a
), (
b
), (

16. c
), and (
d
) above—prepare a table to show the adjustments necessary to
correct the reported amounts.
(Amounts to be deducted should be indicated with a minus sign.
Leave no cells blank - be certain to enter "0" wherever required.
Omit the "$" sign in your response.)
(
a
)
Cost of goods sold:
2010
2011
2012
Reported amount
$ [removed]
$ [removed]
$ [removed]
Adjustments for:
12/31/2010 error
[removed]
[removed]
[removed]
12/31/2011 error
[removed]
[removed]
[removed]
Corrected amount

17. $ [removed]
$ [removed]
$ [removed]
(
b
)
Net income
2010
2011
2012
Reported amount
$ [removed]
$ [removed]
$ [removed]
Adjustments for:
12/31/2010 error
[removed]
[removed]
[removed]
12/31/2011 error
[removed]
[removed]
[removed]
Corrected amount
$ [removed]
$ [removed]
$ [removed]

18. (
c
)
Total current assets
2010
2011
2012
Reported amount
$ [removed]
$ [removed]
$ [removed]
Adjustments for:
12/31/2010 error
[removed]
[removed]
[removed]
12/31/2011 error
[removed]
[removed]
[removed]
Corrected amount
$ [removed]
$ [removed]
$ [removed]

19. (
d
)
Equity:
2010
2011
2012
Reported amount
$ [removed]
$ [removed]
$ [removed]
Adjustments for:
12/31/2010 error
[removed]
[removed]
[removed]
12/31/2011 error
[removed]
[removed]
[removed]
Corrected amount
$ [removed]
$ [removed]
$ [removed]
2.
What is the error in total net income for the combined three-
year period resulting from the inventory errors?

20. (Leave no cells blank - be certain to enter "0" wherever
required. Input your answer as a positive value. Omit the "$"
sign in your response.)
Error in total net income of three years
$ [removed]
Problem 6-5AA Alternative cost flows-periodic L.O. P3
[The following information applies to the questions displayed
below.]
Viper Company began year 2011 with 20,000 units of product in
its January 1 inventory costing $15 each. It made successive
purchases of its product in year 2011 as follows. The company
uses a periodic inventory system. On December 31, 2011, a
physical count reveals that 35,000 units of its product remain in
inventory.
Mar.
7
28,000 units @ $18 each
May.
25
30,000 units @ $22 each
Aug.
1
20,000 units @ $24 each
Nov.
10
33,000 units @ $27 each
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references

21. 7.
value:
4.00 points
Problem 6-5AA Part 1
Required:
1.
Compute the number and total cost of the units available for
sale in year 2011.
(Omit the "$" sign in your response.)
Number of units available for sale
[removed]
units
Cost of the units available for sale
$ [removed]
check my work
references
8.
value:
4.00 points
Problem 6-5AA Part 2
2.
Compute the amounts assigned to the 2011 ending inventory and
the cost of goods sold.
(Input all amounts as positive values. Round per unit costs to 3
decimal places. Round your final answers to the nearest dollar

22. amount. Omit the "$" sign in your response.)
(
a)
FIFO periodic
Total cost of units available for sale
$ [removed]
Less ending inventory on a FIFO basis
[removed]
Cost of units sold
$ [removed]
(b)
LIFO periodic
Total cost of units available for sale
$ [removed]
Less ending inventory on a LIFO basis
[removed]
Cost of units sold
$ [removed]
(c)
Weighted average periodic
Total cost of units available for sale
$ [removed]
Less ending inventory on a weighted average

23. [removed]
Cost of units sold
$ [removed]